Question:
What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 6% simple interest?
Correct Answer
$4680
Solution And Explanation
Solution
Given,
Principal (P) = $3600
Rate of Simple Interest (SI) = 6%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $3600 × 6% × 5
= $3600 ×6/100 × 5
= 3600 × 6 × 5/100
= 21600 × 5/100
= 108000/100
= $1080
Thus, Simple Interest = $1080
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1080
= $4680
Thus, Amount to be paid = $4680 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $3600
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3600 + ($3600 × 6% × 5)
= $3600 + ($3600 ×6/100 × 5)
= $3600 + (3600 × 6 × 5/100)
= $3600 + (21600 × 5/100)
= $3600 + (108000/100)
= $3600 + $1080 = $4680
Thus, Amount (A) to be paid = $4680 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3600, the simple interest in 1 year
= 6/100 × 3600
= 6 × 3600/100
= 21600/100 = $216
Thus, simple interest for 1 year = $216
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $216 × 5 = $1080
Thus, Simple Interest (SI) = $1080
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1080
= $4680
Thus, Amount to be paid = $4680 Answer
Similar Questions
(1) How much loan did Richard borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6440 to clear it?
(2) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11160 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 5% simple interest?
(4) If Richard paid $4176 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) If Michael borrowed $3300 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(6) Betty had to pay $4887.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) Calculate the amount due if Linda borrowed a sum of $3350 at 10% simple interest for 4 years.
(8) If Anthony paid $4988 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Find the amount to be paid if Susan borrowed a sum of $5650 at 3% simple interest for 7 years.
(10) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $6720 to clear the loan, then find the time period of the loan.